Like many in the blockchain and web3 ecosystem, DFINITY says they have been watching recent regulatory developments in the United States with some alarm.
As noted in a blog post, the SEC in particular, has been “taking wide-ranging actions across the industry.”
DFINITY says they are aware of the recent action against Coinbase, an American token exchange that many see as “a beacon of best practices, and good faith behavior.”
In their complaint against Coinbase, the SEC alleges “that several well-known tokens available through Coinbase are securities, including ICP.”
DFINITY claims they are “surprised and dismayed by the inclusion of ICP.”
With regards to the ICP token, they do “not agree that it is a security.” They are also “surprised about the inclusion of some other major tokens.”
As explained in a blog post, ICP is “the utility token of the Internet Computer, which is created by a fully decentralized protocol and network.”
The DFINITY Foundation is “a primary contributor of open source technology used by the Internet Computer network, and also provides support to ecosystem participants, in pursuit of a not-for-profit purpose that is funded by an endowment.”
The DFINITY Foundation is “regulated in Switzerland, where we are a major employer, and our worldwide R&D team is widely regarded as one of the best in the technology industry.”
In Switzerland, the ICP token is “characterized as a type of utility token by authorities, which role it was carefully designed to fulfill.”
They claim that they have always “paid careful attention to securities laws, and do not believe that existing laws classify ICP as a security in the United States either.”
The SEC’s complaint against Coinbase “includes several incorrect statements about ICP, including that ‘DFINITY promotes that it burns ICP tokens as a mechanism to support the price of ICP.’”
DFINITY has never “burned a single ICP token, and has never promoted that it wishes to do so.”
Such misunderstandings “reflect general problems faced by the industry with respect to the diversity and complexity of the technology involved.”
As mentioned in the update:
“We have heard, as have others, that the SEC may now believe that nearly all blockchain tokens are securities, with the possible exception of bitcoin — which might upend past guidance from the SEC regarding utility tokens. If this is true, then the misunderstandings will be more significant, and great efforts must now be made to correct them.”
The blog post further noted:
“Our analysis is that our industry is now under attack in the United States, owing to widespread misunderstandings among politicians and regulators, which situation has largely arisen owing to unfortunate events created by a small subset of our community, and a lack of regulatory clarity for entirely new technology and asset classes. We look forward to joining a vigorous industry-wide defense.”
The DFINITY Foundation will “continue to work with the best lawyers and advisors, both for the benefit of the Internet Computer ecosystem, and the wider blockchain and web3 ecosystem.”
They plan “to become more vocal in our advocacy for our globally critical industry.”